CIPS Level 4
Diploma in
Procurement
and Supply
Ref: 603/3924/X
2018 Syllabus
Version 1
4
Your
qualifıcation
CIPS qualifications are regulated internationally to ensure we offer a recognised, professional
standard in procurement and supply. CIPS Level 4* Diploma in Procurement and Supply is
a vocationally related professional qualification. Formal recognition is included within the
regulatory frameworks of an increasing number of countries such as the UK (England, Wales
and Northern Ireland), UAE (including Dubai) and Africa (including Zambia). Further information
on this recognition and the details of corresponding qualifications levels for other international
qualifications frameworks are detailed on our website. CIPS members can have the confidence
in our regulated qualifications, which reliably indicate the standard of knowledge, skills and
understanding that you, as a learner, are required to demonstrate.
A step up from the Level 3 Advanced Certificate in
Procurement and Supply Operations, the Level 4 Diploma
in Procurement and Supply is a stepping stone to study
on the CIPS Level 5 Advanced Diploma in Procurement
and Supply. The content has been written using the CIPS
Procurement and Supply Cycle as its focus, which presents
a cyclical process of key steps faced by those procuring
goods or services. The Diploma offers the most common
entry route to the profession and should be used by
learners to develop a professional ‘tool box’ which learners
can apply in the practical environment and further develop
at Levels 5 and 6.
Entry level
Level 2
Certificate in
Procurement
and Supply
Operations
Entry level
Level 3
Advanced
Certificate in
Procurement
and Supply
Operations
In this way successful learners will possess transferable
workplace skills, developing their operational and tactical
abilities as they strive for managerial roles and responsibilities.
It is aimed at those in the profession who have procurement
and supply activity at the heart of their role. Learners will be
expected to provide advice and guidance to key stakeholders
on the performance of organisational procedures and
processes associated with procurement and supply and will
aspire to manage developments in and improvements to
the related functions. Transferable skills are those such as
communication, teamwork, and planning and completing
tasks to high standards, all enable the learner to add value to
the organisation.
Highest Entry level
Level 4
Diploma in
Procurement
and Supply
Level 5
Advanced
Diploma in
Procurement
and Supply
Level 6
Professional
Diploma in
Procurement
and Supply
Next steps
This qualification provides progression to the CIPS Level 5 Advanced Diploma in
Procurement and Supply.
* Refers to levels within the UK RQF. Other regulatory bodies may have different corresponding levels
Based on the Operational and Managerial competency levels of CIPS Global Standard
Level 5
60
What will I study?
Credits
required for
completion
Eight CORE modules make up 60 required credits
CORE Level 4 Scope and Influence of Procurement and Supply (L4M1)
12
CREDITS
CORE Level 4 Defining
Business Need (L4M2)
6
CORE Level 4 Commercial
Contracting (L4M3)
CREDITS
CORE Level 4 Ethical and
Responsible Sourcing (L4M4)
6
CREDITS
CORE Level 4 Commercial
Negotiation (L4M5)
CREDITS
CORE Level 4 Supplier
Relationships (L4M6)
6
6
6
CREDITS
CORE Level 4 Whole Life
Asset Management (L4M7)
CREDITS
6
CREDITS
CORE Level 4 Procurement and Supply in Practice (L4M8)
12
CREDITS
Who is it for?
This qualification is the essential toolkit for anyone
planning a career in procurement and supply.
Developed and written using the Procurement and
Supply cycle** as it’s focus, it is at the same level as
the first year of an undergraduate degree course.
It’s suitable for those in operational roles or those
managing or supervising the procurement and supply
function who want to develop their career and work
towards MCIPS Chartered Procurement and Supply
Professional.
What will I learn?
You will learn about making procurement and supply
happen within an organisation, and you will be equipped
with an essential range of knowledge and tools that you
can apply immediately in your workplace. Learn how to
apply practical, theoretical and technical knowledge, gain
a clear understanding of procurement and supply and
develop the ability to address complex, non-routine
problems.
On completion, you will be able to analyse, interpret and
evaluate relevant information and ideas and have an
informed awareness of differing perspectives and
approaches within the profession. You will also be able
to review the effectiveness and appropriateness of
methods, actions and results.
Entry requirements
* The Procurement cycle
This is the only entry point onto our Diploma
qualifications. A minimum of at least two A-levels (or
international equivalent) or a CIPS Level 3 Advanced
Certificate qualification is required. Alternatively,
you will need a minimum of two years’ relevant
experience in a business environment.
is the cyclical process of
key steps when procuring
goods or services.
www.cips.org/en-gb/
knowledge/procurementcycle/
Credit values
To gain a qualification you are required to complete a
total number of credits. This is a way of quantifying the
required number of study hours. 1 credit is equivalent to
10 hours of study. Each module is given a credit value of
6 or 12 credits.
Total credits required
for completion
60
03
About our
exams and your
study commitments
Objective Response exam format (OR)
These questions allow you to select a response from a list of possible answers.
You will find these types of exams across all our qualifications levels and they
are marked by computer and then moderated by CIPS examiners.
Constructed Response exam format (CR)
These questions require you to create or ‘construct’ a response to the question
such as an essay or case study. You will find this type of exam in our diploma
level qualifications and they will be marked by subject expert examiners.
Your total qualification time (TQT)
The TQT indicates the overall number of guided learning hours,
additional self-study and assessment time that is required.
Guided learning hours (GLH)
It is expected that you will undertake 250 GLH. The definition of guided learning
hours is: ‘A measure of the amount of input time required to achieve the
qualification. This includes lectures, tutorials and practicals, as well as
supervised study in, for example, learning centres and workshops’.
Self-study requirement (SSR)
Additionally, we recommend that you also commit to at least 335 SSR
hours. This includes wider reading of the subject areas and revision to give
yourself the best preparation for successfully achieving the qualification.
Total exam time
All the modules in CIPS qualifications are assessed by an examination.
cips.org/qualifications
OR
CR
600
TQT HRS
250
GLH HRS
335
SSR HRS
15
HRS
C
CORE MODULE
CIPS GLOBAL
STANDARD
1.1 • 1.2 • 1.3 • 1.4
3.1 • 3.2 • 4.1 • 6.1
6.2 • 7.1 • 8.1 • 11.1
CR
CONSTRUCTED
RESPONSE EXAM
3
HRS
EXAM DURATION
HOURS
120
Scope and
Influence of
Procurement
and Supply
[L4M1]
Module purpose
On completion of this module, learners will be able to identify the key stakeholders in the
application of the sourcing process and analyse the procurement cycle, evaluating the
influence that procurement and supply has as a source of added value for the organisation.
Module aim(s)
In any organisation, a significant proportion of costs are accounted for by the purchases
of products and/or services, hence organisations see procurement and supply as a key
contributor to their value added strategies. Equally, any organisation will also be managing
the supply of products and/or services to their customers, be they internal or those from
other external organisations, consumers or the general public. This module is designed
using the CIPS Procurement Cycle as its basis. It will provide those who are interested in
developing an informed awareness of different perspectives or approaches within the
discipline, an overview of the key stages associated with procurement and supply, and
will serve as an introduction for those who are expected to address complex well-defined
procurement and supply problems that are non-routine in nature.
HRS
MODULE
LEARNING
TIME
12
Credit value
CREDITS
05
Learning outcomes, assessment criteria and indicative content
1.0 Understand and analyse the added value that can
be achieved through procurement and supply chain
management
1.1 Describe the categories of spend that an organisation
may purchase
• Definitions of procurement and purchasing and
supply
• Typical breakdown of organisational costs
represented by procurements of goods, services or
constructional works
• Stock and non-stock procurements
• Direct and indirect procurements
• Capital purchases and operational expenditures
• Services procurements
1.2 Analyse the different sources of added value in
procurement and supply
• The five rights of procurement
• Defining total life cycle costs or the total costs of
ownership
• Achieving quality, timescales, quantities and place
considerations in procurements from external
suppliers
• Other sources of added value such as innovation,
sustainability and market development
• Defining value for money
1.3 Compare the concepts of procurement and supply
chain management
• Definitions of procurement, supply chains, supply
chain management and supply chain networks
• Comparisons of supply chain management with
procurement
• Complex Supply Chains
• Definitions of logistics and materials management
1.4 Differentiate the stakeholders that a procurement or
supply chain function may have
• Defining stakeholders
•
Examples of stakeholders for a procurement or
supply chain function
•
Mapping stakeholders for a procurement or supply
chain function
cips.org/qualifications
2.0 Understand and analyse the key steps when procuring
goods or services
2.1 Explain the key aspects of the procurement cycle
• The CIPS Procurement Cycle defining the stages of a
generic sourcing process from identification of needs
to contract award and implementation and end of
life disposal
• Differentiating between pre contract award and post
contract award stages
2.2 Analyse the key stages of a sourcing process
• Stages of the sourcing process that relate to
defining needs, creation of contract terms, supplier
selection, contract award and contract or supplier
management
• The purpose and added value that is created by each
of the stages of the sourcing process
2.3 Explain how electronic systems can be used at
different stages of the sourcing process
• E-requisitioning, e-catalogues, e-ordering, e-sourcing
and e-payment technologies
• The impact of electronic purchase to pay (P2P)
systems on the sourcing process
2.4 Analyse the relationship between achieving
compliance with processes and the achievement of
outcomes
• Organisational needs for structured sourcing
processes
• The relationship between process compliance and
the achievement of added value outcomes
3.0 Understand and analyse the key aspects of
organisational infrastructure that shape the scope of a
procurement or supply chain function
4.0 Understand and analyse the need for compliance
with requirements when undertaking procurement
activities in different sectors
3.1 Explain key aspects of corporate governance of a
procurement or supply chain function
• Conflicts of interest
• The need for documented policies and procedures
for procurement
• Organisational accountability and reporting for
procurement roles and functions
• The status of procurement and supply chain
management within organisations
• Codes of ethics in procurement
• The CIPS Code of Conduct
4.1 Classify different economic and industrial sectors
• Economic classifications including public and private
sectors, charities, not-for-profit and third sector
• Industrial classifications and sectors such as
manufacturing, retail, construction, financial,
agriculture and service
3.2 Analyse the impact of organisational policies and
procedures on procurement
• Aspects that can be included in procedures for
procurement and supply such as responsibilities for
procurement, regulations relating to competition,
levels of delegated authority, responsibilities for the
stages of the sourcing process, invoice clearance and
payment
• The use of procurement policies, procurement
strategies and procurement manuals
• The involvement of internal functions and personnel
in the sourcing process
• Responsible Procurement and the International
Labour Organisation core conventions
3.3 Examine the different structures of a procurement or
supply chain function
• The use of centralised and devolved structures
•
Hybrid structures of a procurement or supply chain
function (such as consortium structures, shared
services, lead buyer structures, and outsourced)
Interacting with people and building rapport
•
The need for customer service and value for money
outcomes
4.2 Analyse the impact of the public sector on
procurement or supply chain roles
• Objectives of public sector organisations such as
improving services, communities and corporate
social responsibility
• Regulations that impact on procurement and supply
chain operations
• Need for competition, public accountability and value
for money
4.3 Examine the impact of the private sector on
procurement or supply chain roles
• Objectives of private sector organisations such as
profitability, market share, shareholder value and
corporate social responsibility
• Regulations that impact on procurement and supply
chain operations
• The importance and role of branding
4.4 Examine the impact of the not-for-profit or third
sector on procurement or supply chain roles
• Objectives of the not-for-profit or third sector
•
•
Regulations impacting on charities
Need for regulated procurement exercises
3.4 Explain the common IT systems that can be used by a
procurement or supply chain function
• P2P systems
•
•
•
Systems for inventory management
Enterprise Resource Planning (ERP) technologies
Communications systems for internal and external
use
07
Defıning
Business Need
C
CORE MODULE
[L4M2]
CIPS GLOBAL
STANDARD
2.2 • 2.3
Module purpose
On completion of this module, learners will be able to devise a business case for
requirements to be externally sourced and will understand the role of market management
and competitive forces as they specify goods and services in procurement and supply.
Module aim(s)
The development of a business case and the ability to analyse markets are key if an
organisation is to successfully source activity from external suppliers. Similarly, the
clear definition of specifications for through life contracts is crucial to overall business
achievement. This module is designed for those who are expected to analyse, interpret and
evaluate information on the different types of markets utilised by procurement and supply.
It explores a variety of elements that underpin the development of business cases and
specifications and considers the options that should be explored when procurement and
supply personnel are involved in defining requirements.
OR
OBJECTIVE
RESPONSE EXAM
1.5
HRS
EXAM DURATION
HOURS
60
HRS
MODULE
LEARNING
TIME
Credit value
6
CREDITS
cips.org/qualifications
Learning outcomes, assessment criteria and indicative content
1.0 Understand how to devise a business case for
requirements to be sourced from external suppliers
1.1 Analyse how business needs influence procurement
decisions
• Type of purchase such as new purchase, modified rebuy, straight re-buy
• Implications of the business needs on the types of
purchase
• Procurement’s role in developing a business case
1.2 Identify how costs and prices can be estimated for
procurement activities
• Types of market data that can provide information
on costs and prices
• Direct and indirect costs
• Producing estimated costs and budgets
• Approaches to total costs of ownership/whole life
cycle costing
1.3 Analyse the criteria that can be applied in the creation
of a business case
• Examples of criteria typically applied in the
production of a business case: costs, benefits,
options, alignment with organisational needs and
timescales
• Benchmarking requirements
1.4 Interpret financial budgets for the control of
purchases
• The purpose of financial budgets
•
•
•
Cost entries and timings of cash flows
Performance and control of budgets
Dealing with variances to budget
2.0 Understand market management in procurement and
supply
2.1 Analyse the different types of markets utilised by
procurement and supply
•
•
•
•
•
•
Such as:
Manufacturing
Construction
Retail
Financial
Agriculture
Services
2.2 Compare the competitive forces that influence
markets
• Bargaining strength of suppliers and buyers,
•
2.3 Contrast the breakdown between direct and
indirect costs and the types of data that can provide
information on cost and price
• Collate sources of information to estimate the
breakdown of costs between direct and indirect costs
for purchased goods and services
• Use information to prepare budgets or to negotiate
prices
• Research market data and use to estimate and
negotiate current and future prices and costs for
purchased goods and services
3.0 Understand the use of specifications in procurement
and supply
3.1 Analyse different types of specifications used in
procurement and supply and sources of information
that can be used to create specifications
• Drawings, samples, branded, technical
• Conformance specifications
• Output or outcome, statement of work based
specifications
• Standards
•
•
•
The internet
Suppliers
Directories
3.2 Identify sections of specifications for through life
contracts
• Scope
•
•
•
•
•
Definition
Description of requirement
Testing and acceptance
Change control mechanisms and remedies
Social and environmental criteria
3.3 Identify the risks that can result from inadequate
specifications and mitigation approaches
• Under or over specified need
•
Monitor specification creation by colleagues and
other internal stakeholders
3.4 Identify opportunities to regulate short and longer
term specifications
• Implement standardisation
•
•
•
Value analysis
Value engineering
Provide guidance to internal stakeholders on
implementation
Availability of substitutes and threat of entry
09
Commercial
Contracting
C
CORE MODULE
[L4M3]
CIPS GLOBAL
STANDARD
1.3 • 4.1 • 5.1 • 5.2
5.3 • 7.5 • 8.2 • 8.3
Module purpose
On completion of this module, learners will be able to describe the key elements and legal
aspects of formal commercial contracts, and analyse and interpret the fundamentals
of specifications and key performance indicators that are included in contractual
arrangements made with suppliers.
Module aim(s)
In any organisation, a significant element of the procurement and supply function is based
around the contracting process. If they are to be successful, contracts must be clearly
defined, be cognisant of legal requirements and contain key clauses and terms. This module
is designed for those working in the procurement and supply field, or those who have
responsibility for the development of legally binding contracts with suppliers.
OR
OBJECTIVE
RESPONSE EXAM
1.5
HRS
EXAM DURATION
HOURS
60
HRS
MODULE
LEARNING
TIME
Credit value
6
CREDITS
cips.org/qualifications
Learning outcomes, assessment criteria and indicative content
1.0 Understand the legal issues that relate to the
formation of contracts
1.1 Analyse the documentation that can comprise a
commercial agreement for the supply of goods or
services
• Invitation to tender or request for quotation
• Specification
• Key performance indicators (KPIs)
• Contractual terms
• Pricing and other schedules (such as for health
and safety records, details of suppliers staff, use
of sub-contractors, non-disclosure/confidentiality
agreements)
1.2 Analyse the legal issues that relate to the creation of
commercial agreements with customers or suppliers
• Invitations to treat or invitations to negotiate
• Rules relating to offer and acceptance, consideration,
intention to create legal relations and capacity to
contract
• The battle of the forms and precedence of contract
terms
• Risks presented by contracting on suppliers terms or
through oral contracts
• The Vienna Convention on the International Sales of
Goods
• Misrepresentations made pre-contract award
1.3 Compare types of contractual agreements made
between customers and suppliers
• One off purchases
•
•
•
•
•
Framework arrangements and agreements
The use of mini-competitions
Call offs
Services contracts
Contracts for the hire and leasing of assets
2.0 Understand the fundamentals of specifications and
key performance indicators that are included in
contractual arrangements made with suppliers
2.1 Analyse the content of specifications for
procurements
• Drafting specifications and developing market
dialogue with suppliers
• The use of standards in specifications
• Typical sections of a specification
• Standardisation of requirements versus increasing
the range of products
• Including social and environmental criteria in
specifications
• The role of Information Assurance in developing
specifications
2.2 Appraise examples of key performance indicators
(KPIs) in contractual agreements
• Defining contractual performance measures or key
performance indicators (KPI)
• The use of service level agreements
•
Typical KPI measures to assess quality performance,
timeliness, cost management, resources and delivery
3.0 Understand the key clauses that are included in
formal contracts
3.1 Analyse contractual terms for contracts that are
created with external organisations
• The use of express terms
•
The use of standard terms of business by both
purchasers and suppliers
•
The use of model form contracts such as NEC, FIDIC,
IMechIEE
3.2 Recognise examples of contractual terms typically
incorporated into contracts that are created with
external organisations
• Key terms in contracts for indemnities and liabilities,
sub-contracting, insurances, guarantees and
liquidated damages
• Terms that apply to labour standards and ethical
sourcing
3.3 Recognise types of pricing arrangements in
commercial agreements
• The use of pricing schedules
•
•
The use of fixed pricing arrangements
Cost plus and cost reimbursable pricing
arrangements
•
The use of indexation and price adjustment formulae
The use of incentivised contracts
Payment terms
•
•
11
Ethical and
Responsible
Sourcing
[L4M4]
Module purpose
On completion of this module, learners will be able to explain the options and associated
processes available for sourcing with external suppliers. They will also examine the legal and
ethical impact and the implications of corporate social responsibility, on the final sourcing
decision.
Module aim(s)
In any organisation, a significant element of procurement and supply activity is based around
decisions to internally conduct activity or to source from an external supplier. Hence, the
selection of the correct external suppliers is a vital contributor to overall organisational
success. This module enables personnel with roles in procurement and supply to formulate
selection criteria and sourcing strategies to ensure that the organisation will make the
correct choice of external suppliers. It explains options for sourcing, and examines the key
processes that can be applied to the analysis of potential external suppliers and to ensure the
development of ethically and socially responsible sourcing agreements.
C
CORE MODULE
CIPS GLOBAL
STANDARD
6.4 • 6.5 • 11.3
OR
OBJECTIVE
RESPONSE EXAM
1.5
HRS
EXAM DURATION
HOURS
60
HRS
MODULE
LEARNING
TIME
Credit value
6
CREDITS
cips.org/qualifications
Learning outcomes, assessment criteria and indicative content
1.0 Understand options for sourcing requirements from
suppliers
2.0 Understand the key processes that can be applied to
the analysis of potential external suppliers
1.1 Identify the sourcing process in relation to
procurement
• Definitions of sourcing and outsourcing
• Make or buy decisions
• Strategic and tactical sourcing costs and benefits of
outsourcing
• Outsourcing non-core and core work or services
• Supplier pre-qualification or criteria for supplier
appraisal
• Vendor or supplier performance management
• Risks in outsourcing
• The market development and growth of outsourcing
• Regulations affecting employees terms of
employment
2.1 Analyse commonly used sources of information
on market data that can impact on the sourcing of
requirements from external suppliers
• Compiling data on expenditures on suppliers
• Indices that measure economic data
• Secondary data on markets and suppliers
• Commodity pricing
• Analysing potential sales
• Financial reports and supplier financial stability
• The role of credit rating agencies
1.2 Differentiate between approaches to the sourcing of
requirements from suppliers
• Single, dual and multiple sourcing arrangements
• The use of tendering: open, restricted and negotiated
approaches to tendering
• Direct negotiations with suppliers
• Intra company trading and transfer pricing
arrangement
• Implications of international sourcing
1.3 Define selection criteria that can be commonly applied
when sourcing requirements from external suppliers
• Typical selection criteria such as; quality assurance,
environmental and sustainability, technical
capabilities, systems capabilities, labour standards,
financial capabilities and credit rating agencies
• The importance of supplier financial stability and due
diligence checks
• Ratio analysis to make conclusions on profitability,
liquidity, gearing and investment
• The limitations of ratio analysis
2.2 Identify the key processes used for obtaining
quotations and tenders
• Advertising requirements
• Requests for information or quotations
• The operation of tendering
• Formalised arrangements for tendering
• Decision criteria for dispensing with tendering
2.3 Identify the criteria that can be commonly applied to
the assessment of quotations or tenders
• Assessment of suppliers proposals
•
•
•
The use of weighted points systems for assessment
Recommending sources of supply
Financial statements such as the profit and loss,
balance sheet and cash flow statements
•
Measures and ratios of profitability, liquidity, gearing
and investment
•
The limitations of ratio analysis
Added value
•
2.4 Analyse how electronic systems can be used to help
the sourcing of requirements from external suppliers
• E-requisitioning and purchase ordering systems
•
•
•
E-catalogues on intranets and the internet
The use of e-auctions and reverse auctions
E-tendering systems
1.4 Define award criteria that can be commonly applied
when sourcing requirements from external suppliers
• Typical award criteria such as; price, total life cycle
costs, technical merit, added value solutions, systems
and resources
• Balancing commercial and technical award criteria
13
3.0 Understand compliance issues when sourcing from
suppliers
3.1 Compare the key legislative, regulatory and
organisational requirements when sourcing in the notfor-profit, private and public sectors
• The use of competitive tendering processes
• The impact of timescales on tendering processes
• Procedures for contract award
• Regulatory bodies that impact on the private sector
• Regulations that impact on product and safety
standards
3.2 Compare the key legislative, regulatory and
organisational requirements when sourcing from
international suppliers
• Documentation relating to imports
• Import duties and tariffs
• Payment mechanisms
• The use of INCOTERMS
• Customs control and clearance
• Currency regulations
• Applicable law
4.0 Understand ethical and responsible sourcing
4.1 Describe the impact of international ethical standards
on procurement and supply
• Bribery
• Corruption
• Fraud
• Human rights
• Modern slavery
4.2 Identify practices that support ethical procurement
• Application of the CIPS Code of Conduct
• Ethical codes of practice
• Prequalification and assessment criteria
• Due diligence on suppliers and risk assessment
• Supporting information on ethical practices in
supplier quotations and tenders
• Contractual clauses
• Supplier monitoring
• KPIs
4.3 Compare the use of audits and other feedback
mechanisms to evaluate ethical standards in the
workplace
• Monitor supplier performance
•
Encourage dialogue with suppliers on improvements
to process
•
Recommend remedial actions where appropriate
Identify and address potential conflicts of interest
•
4.4 Contrast processes and practices that the
organisation could adopt to meet the requirements of
Corporate Social Responsibility (CSR)
• The triple bottom line – profit, people and planet
cips.org/qualifications
•
Adopt sustainable practices, standards and
specifications in the supply chain
•
Consider the social impact of the organisation’s
behaviours
•
Design procurement processes to deliver social
outcomes as well as, or as an alternative to, normal
economic measures of value
•
Expand reporting frameworks to include ecological
and social performance
•
Define organisational value for money to include
social outcomes - use of local labour, participation of
disadvantaged groups
C
CORE MODULE
Commercial
Negotiation
[L4M5]
CIPS GLOBAL
STANDARD
6.6 • 7.3 • 7.4
OR
OBJECTIVE
RESPONSE EXAM
1.5
HRS
EXAM DURATION
HOURS
Module purpose
On completion of this module learners will be able to identify approaches to successfully
achieving negotiated commercial agreements with external organisations.
Module aim(s)
The creation of formalised agreements is a critical part of the success of any organisation.
Those involved in procurement and supply activity will therefore be able to effectively
negotiate with stakeholders and/or suppliers and to understand the methods associated
with preparing for and carrying out commercial negotiations. This module is designed for
those who are faced with negotiations. It enables the learner to analyse approaches to the
negotiation of agreements made with external parties, how to prepare for them and what
techniques are available to ensure successful outcomes.
60
HRS
MODULE
LEARNING
TIME
6
Credit value
CREDITS
15
Learning outcomes, assessment criteria and indicative content
1.0 Understand key approaches in the negotiation of
commercial agreements with external organisations
1.1 Analyse the application of commercial negotiations in
the work of procurement and supply
• Definitions of commercial negotiation
• Negotiation in relation to the stages of the sourcing
process
• Sources of conflict that can arise in the work of
procurement and supply
• Team management and the influence of
stakeholders in negotiations
1.2 Differentiate between the types of approaches that
can be pursued in commercial negotiations
• Collaborative win-win integrative approaches to
negotiations
• Distributive win-lose, distributive approaches to
negotiation
• Pragmatic and principled styles of negotiation
• Setting targets and creating a best alternative to a
negotiated agreement (BATNA)
1.3 Explain how the balance of power in commercial
negotiations can affect outcomes
• The importance of power in commercial negotiations
• Sources of personal power
•
Organisational power: comparing the relative power
of purchasers and suppliers
•
How suppliers gather information on purchasers
How purchasers can improve leverage with suppliers
•
1.4 Identify the different types of relationships that
impact on commercial negotiations
• The relationship spectrum
•
•
Building relationships based on reputation, and trust
Repairing a relationship
2.0 Know how to prepare for negotiations with external
organisations
2.1 Describe the types of costs and prices in commercial
negotiations
• Types of costs: direct and indirect, variable and fixed
•
•
Break-even analysis: cost volume profit formulae
Costing methods such as absorption, marginal or
variable and activity based costing
•
Volumes, margins and mark ups and their impact on
pricing
•
Negotiating prices
2.2 Contrast the economic factors that impact on
commercial negotiations
• The impact of microeconomics and market types on
commercial negotiations
• Macroeconomics and its influence on commercial
negotiations
• Sources of information on micro and macro
economics
2.3 Analyse criteria that can be used in a commercial
negotiation
Criteria such as:
• Setting objectives and defining the variables for a
commercial negotiation
• The bargaining mix
• Positions and interests
• Openings and presenting issues
2.4 Identify the resources required for a negotiation
• Choice of location
• Involving appropriate colleagues
• Use of telephone, teleconferencing or web based
meetings
• Room layout and surroundings
3.0 Understand how commercial negotiations should be
undertaken
3.1 Identify the stages of a commercial negotiation
• Defining the stages of a negotiation such as: preparation, opening, testing, proposing, bargaining,
agreement and closure
• How behaviours should change during the different
stages of a negotiation
3.2 Appraise the key methods that can influence the
achievement of desired outcomes
• The use of persuasion methods
•
The use of tactics to influence the other party
3.3 Compare the key communication skills that help
achieve desired outcomes
• Types of questions
•
•
•
•
•
Effective listening
Push and pull behaviours
Nonverbal communication
The influence of culture in commercial negotiations
The use of emotional intelligence in commercial
negotiation
3.4 Analyse how to assess the process and outcomes of
negotiations to inform future practice
• Reflecting on performance
•
•
cips.org/qualifications
Opportunities for improvement and development
Protecting relationships after the negotiation
C
CORE MODULE
Supplier
Relationships
[L4M6]
CIPS GLOBAL
STANDARD
1.2 • 1.4 • 2.1
6.3 • 9.3
OR
OBJECTIVE
RESPONSE EXAM
1.5
HRS
EXAM DURATION
HOURS
Module purpose
On completion of this module, learners will be able to analyse the dynamics of supplier
relationships, examine the processes and procedures for working with stakeholders and
appreciate the concept of partnering.
Module aim(s)
In any organisation, a significant element of the procurement and supply function is based
around decisions to source activity from external suppliers. Once agreements have been
established the relationship established with the supplier is paramount to overall success. At
its highest level outsourcing can take the form of a partnership or joint venture. This module
is designed for those who have responsibility for maintaining and managing relationships
with stakeholders and suppliers and for those who may be faced with establishing and
developing formal partnerships.
60
HRS
MODULE
LEARNING
TIME
6
Credit value
CREDITS
17
Learning outcomes, assessment criteria and indicative content
1.0 Understand the dynamics of relationships in supply
chains
1.1 Differentiate between different types of commercial
relationships in supply chains
• Internal and external relationships
• The relationship spectrum
• The relationship life cycle
1.2 Appraise portfolio analysis techniques to assess
relationships in supply chains
• Matrices to identify supply, supplier and purchaser
positioning
• Developing action plans
1.3 Identify the competitive forces that impact on
relationships in supply chains
• Sources of competitive advantage
• Competitive forces: sources of competitive rivalry,
bargaining power of buyers and suppliers, threat of
new entrants and potential substitutes
• STEEPLE factors that impact on supply chains (social,
technological, economic, environmental, political,
legislative and ethical)
1.4 Compare the sources of added value that can be
achieved through supply chain relationships
• The link between relationships as a process and the
achievement of added value outcomes
• Sources of added value: pricing and cost
management, improving quality, timescales,
quantities and place considerations in procurements
from external suppliers
• The link between organisations in supply networks
2.0 Understand processes and procedures for successful
working with stakeholders
2.1 Analyse the purpose of organisational procedures and
processes in sourcing goods and/or services
• Achieving value for money
•
•
Supplier identification, assessment and selection
Selection and awarding criteria
2.2 Compare team management techniques to ensure
positive stakeholder relationships
• Positive relationships through positive contributions
•
•
•
•
Overcome resistance
Identify conflict and coping processes
Cross-organisational teams
Stages of team development – forming, storming,
norming, performing
cips.org/qualifications
2.3 Compare the practical considerations of stakeholder
management
• Accurate cost modelling
• Reduced impact of price fluctuations
• Early supplier involvement in product and/or service
development
• Knowledge transfer and access to innovation
• Common metrics to drive change for both
organisations
• Improve risk management and continuity of supply
2.4 Identify the processes for terminating stakeholder
relationships
• Reasons for termination
• The process of termination
• Timing
• Relationship impacts – amicable vs. hostile
• Legal considerations – finances, confidentiality, IPR,
security, employee rights
• Succession issues – continuity of supplies
3.0 Understand the concept of partnering
3.1 Analyse the concept of partnering and where it is a
suitable approach
• The three types of partnering
•
•
•
•
•
•
•
•
•
Partnering vs. ‘traditional’ contracting agreement
The drivers for partnership sourcing
Advantages for purchaser and supplier
High spend
High risk
Technically complicated supplies
New services
Fast-changing technology
Restricted markets
3.2 Appraise the process of partnership implementation
• Identify items potentially suitable for partnership
sourcing
• ‘Sell’ the philosophy to senior management and other
functions of the organisation
• Define the standards that potential partners will be
expected to meet
• Establish joint commitment to the partnership
•
Reviews and audits
3.3 Identify the reasons why partnerships fail
• Poor communication
• Lack of senior management support and trust
• Lack of commitment by one or both parties
• Poor planning
• Lack of value-added benefit
• Changes in the market
• Corporate cultural differences
• Logistics and distance barriers
C
CORE MODULE
Whole Life Asset
Management
[L4M7]
CIPS GLOBAL
STANDARD
4.2 • 4.3
OR
OBJECTIVE
RESPONSE EXAM
1.5
HRS
EXAM DURATION
HOURS
60
Module purpose
On completion of this module, learners will be able to explain methods of inventory storage
and control and analyse the concept of whole life cost from concept through to disposal.
Module aim(s)
Whole life costing takes into account the total cost of a product or service over its lifetime,
from concept through to disposal including purchase, hire or lease, maintenance, operation,
utilities, training and disposal. Hence, it is important for those involved in the procurement
and supply function to take all these elements into consideration when making decisions and
comparing the costs of buying, renting or leasing equipment. In most cases the purchase
costs are a small proportion of the cost of operating it. Although costly, there are numerous
reasons why organisations elect to hold inventory. The management and control of such
inventory is therefore vital to organisational success. This module is designed for those who will
have responsibility for the whole life management of assets and enables learners to analyse
methods for inventory movement and control and to analyse the concept of whole life cost.
HRS
MODULE
LEARNING
TIME
6
Credit value
CREDITS
19
Learning outcomes, assessment criteria and indicative content
1.0 Understand methods for the storage and movement
of inventory
1.1 Identify the principles, purpose and impact of stores
and warehouse design
• Location of stores and warehouses
• Stores and warehouse design
• Factors that influence stores and warehouse layout
• Flow, space utilisation and flexibility
1.2 Explain the use of product coding in inventory
operations
• Systems for product coding
• Bar coding
• Order tracking technologies
• The use of RFID technologies
1.3 Contrast the impact of the use of different
warehousing equipment
Approaches such as:
• Materials handling equipment
• Palletisation and unit loads
•
•
•
Packing and packaging
Environmental standards for packaging
The use of automation in warehousing
2.0 Understand the key elements of effective inventory
control
2.1 Differentiate between the different classifications of
inventory
• Opening stock, work in progress, safety stock and
finished goods
• Obsolescent and redundant stock
•
•
•
Direct and Indirect supplies
ABC classifications of stock that may apply
Dependent demand and independent demand items
of stock
2.2 Identify the direct and indirect costs of holding
inventory
• Acquisition costs
•
•
•
Holding costs
Cost of stock outs
Discuss options to reduce costs whilst mitigating any
negative impact on service levels
cips.org/qualifications
2.3 Identify techniques associated with inventory control
• Subjective and objective forecasting
• Re-order quantities and levels
• MRP and MRPII
• ERP
• Just-in-time
• Lean
• Inventory performance measures – lead times,
service levels, rate of stock turn, stock outs in a given
period, stock cover
3.0 Understand the concept of through life cost
3.1 Analyse the contributing factors when establishing
total cost of ownership
• Purchase price
• Hire or lease
• Acquisition costs
• Usage costs
• Maintenance costs
• Operation
• Utilities
•
•
Training
Disposal and end-of-life costs
3.2 Compare the factors to consider when building a total
cost of ownership model
• Include all costs
• Use best estimates of values available
•
Hidden costs – global sourcing, risks associated with
extended supply chain
•
Only develop for larger purchases
Ensure senior management support
Cross functional support – ensure access to data
Team working – reduce data collection time
•
•
•
3.3 Identify the contributing elements to end-of-life costs
• Decommissioning
• Removal or disposal processes
• Legal aspects – waste management
• Environmental factors
• Triple bottom line – people, planet, profit
C
CORE MODULE
CIPS GLOBAL
STANDARD
1.1 • 1.2 • 1.3 • 1.4
4.2 • 11.1 • 11.2 • 11.3
CR
CONSTRUCTED
RESPONSE EXAM
3
HRS
EXAM DURATION
HOURS
120
Procurement
and Supply
in Practice
[L4M8]
Module purpose
On completion of this module, learners will be able to demonstrate the practical application
of the key elements of the procurement cycle in an integrated manner, within a workplace
context.
Module aim(s)
Procurement is the business function that ensures identification, sourcing, access and
management of external resources that an organisation needs or may need to successfully
fulfil its strategic objectives. It exists to explore supply market opportunities and to implement
resourcing strategies that deliver the best possible supply outcomes to the organisation, its
stakeholders and customers. In today’s volatile global trading environments, it is not enough
for procurement and supply professionals to simply know the theory behind their profession;
they must also be in a position to confidently and effectively apply that knowledge to the
benefit of the whole organisation, its stakeholders and customers. This module is designed to
test the practical application of procurement and supply concepts and ideas within the practical
environments which professionals are expected to perform.
HRS
MODULE
LEARNING
TIME
12
Credit value
CREDITS
21
Learning outcomes, assessment criteria and indicative content
1.0 Demonstrate the application of the procurement cycle
1.1 Apply the key stages of the procurement cycle to the
practical procurement and supply environment
The practical application of the CIPS
Procurement Cycle:
• Defining business need,
• Market analysis and testing,
• Supplier evaluation,
• Tendering processes,
• Supplier and stakeholder management
2.0 Demonstrate the application of the key stages of the
sourcing process
2.1 Apply the key stages of the sourcing process to the
practical procurement and supply environment
Stages of the sourcing process:
• Creation of contract terms,
• Supplier selection,
• Contract award
• Contract or supplier management
3.0 Demonstrate the application of whole life asset
management
3.1 Apply whole life asset management to the practical
procurement and supply environment
• Include all costs – purchase price through to disposal
and end-of-life
• Hidden costs – global sourcing, risks associated with
extended supply chain
• Only develop for larger purchases
• Ensure senior management support
• Cross functional support – ensure access to data
• Team working – reduce data collection time
• Decommissioning
• Removal or disposal processes
• Legal aspects – waste management
4.0 Demonstrate the application of ethical and
responsible sourcing within an organisation
4.1 Apply ethical and responsible sourcing to the practical
procurement and supply environment
• Bribery, Corruption, Fraud, Human rights, Modern
slavery
• Application of the CIPS Code of Conduct
•
•
•
Ethical codes of practice
Environmental factors
Supporting information on ethical practices in
supplier quotations and tenders
•
Supplier monitoring and KPIs
The triple bottom line – profit, people and planet
Adopt sustainable practices, standards and
specifications in the supply chain
•
•
cips.org/qualifications
•
Consider the social impact of the organisation’s
behaviours.
•
Expand reporting frameworks to include ecological
and social performance
23
About CIPS, the
Chartered Institute
of Procurement
& Supply
The professional body
CIPS, a not-for-profit organisation that exists for the public good, is the voice of the
profession, promoting and developing high standards of skill, ability and integrity among
procurement and supply chain professionals.
Quality guaranteed
Our qualifications are recognised by OFQUAL in England and regulators in various countries,
demonstrating that they meet specific quality standards.
The Global Standard
CIPS Global Standard in Procurement and Supply, which is freely available, sets the
benchmark for what good looks like in the profession.
A commercial organisation
CIPS helps governments, development agencies, and businesses around the world to excel
in procurement and supply, supporting them to improve and deliver results and raise
standards.
A global community
We are the world’s largest professional body dedicated to procurement and supply with a
global community of over 200,000 professionals in over 150 countries, and offices in Africa,
Asia, Australia, the Middle East, Europe and USA.
Global Standard
freely available
Global network
of over 200,000
...in over 150
countries
cips.org
CIPS™ is a registered trademark of the Chartered Institute of Procurement & Supply
Copyright ©2018 CIPS. Content may not be copied, reproduced, published, altered or transmitted in any form or by any means, in whole or in part, without the prior written permission of CIPS.L4B/FEB/2019/V3